A prominent adviser to China's central bank has suggested the government drop a specific growth target for 2020 as the coronavirus outbreak has caused unprecedented damage to the economy, shedding light on the deep divide over policy in Beijing.
"China can hardly achieve the 6 per cent target because of the coronavirus pandemic," Ma Jun, an academic member of the People's Bank of China's monetary policy committee, told the state-owned Economic Daily.
"It is also hard to maintain 4-5 per cent growth … because it will largely depend on how the pandemic develops in Europe and the United States."
Debate over whether China should set a growth target this year has been getting louder among Chinese policy advisers in recent weeks, especially after production and investment went into free fall during the first two months of the year, stoking fears of a contraction in the first quarter of 2020.
It is also hard to maintain 4-5 per cent growth … because it will largely depend on how the pandemic develops in Europe and the United StatesMa Jun
While China's official purchasing managers' indices - a survey of sentiment among factory owners and service sector firms in the world's second largest economy - showed strong rebounds on Tuesday, the national statistics agency said they were in no way an indication that the world's second biggest economy had returned to normal.
President Xi Jinping has said China is still committed to its "economic and social development goals" and grand vision of building a "comprehensively well-off society" this year, which includes doubling gross domestic product (GDP) in the decade to 2020. That would require a minimum growth rate of about 5.6 per cent, analysts say.
But pursuing a high pace of economic expansion would "kidnap macroeconomic policies and eventually force the use of an all-out stimulus," Ma said.
Ma has long called for Beijing to give up its GDP target, saying as early as 2017 that China should set a target around its jobless rate instead.
The World Bank on Tuesday slashed its baseline forecast for China's growth this year to 2.3 per cent, from 6.1 per cent.
China International Capital Corporation, one of the country's leading brokerages, estimated the pandemic could knock 6 percentage points from this year's growth, and sharply lowered its forecast to 2.6 per cent from 6.1 per cent, despite growing fiscal support.
The government usually announces its annual growth target at the National People's Congress, but this year's gathering scheduled for March was postponed because of the outbreak.
While Xi tried to play down its significance, headline growth remains the single most important measurement for central and local government performance in China. In 2015, Shanghai gave up its GDP growth target, but the city resumed the tradition the following year.
Premier Li Keqiang said in mid-March that the 2020 economic growth rate was "not a big deal" as long as China keeps the job market stable, in comments interpreted as subtly playing down a specific goal for this year.
But other analysts have called for China to carry on with its decades-old tradition.
Li Xunlei, chief economist at brokerage Zhongtai Securities, said a GDP target was needed to send policy signals to local authorities and investors.
Cancelling it "would only hurt the enthusiasm of local governments in resuming production" damaged by the coronavirus, Li said on Tuesday.
Qiu Xiaohua, the former head of China's National Bureau of Statistics, wrote in a recent article that Beijing should clearly set a minimum target, and suggested it be 4 per cent for the year.
While debate continues, China's government has stepped up support for the economy, which is now facing a second wave of shock as export orders vanish as the outbreak spreads in North America and Europe.
At a Politburo meeting last Friday, Xi said that China would make "a package of macroeconomic policies" to support growth, including a higher fiscal deficit ratio and special government bonds.
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